10-Q: Reliance Global Group Shifts to Digital Assets, Boosts Liquidity

Reliance Global Group reports improved net loss and strengthened liquidity in Q3 2025, driven by asset sale and capital raises, while embarking on a new digital asset treasury strategy.

Summary

• Net loss for the nine months ended September 30, 2025, improved to $(5,604,367) from $(7,673,373) in the prior year, a 27% reduction.
• Basic loss per share significantly improved to $(1.44) for the nine months ended September 30, 2025, compared to $(10.56) for the same period in 2024.
• Total revenue (commission income) decreased by 8.72% to $9,818,872 for the nine months ended September 30, 2025, primarily due to the sale of Fortman Insurance Services and lower medical commission revenues.
• Adjusted EBITDA (AEBITDA) for the nine months ended September 30, 2025, worsened to $(918,706) from $(209,114) in the prior year.
• Cash and restricted cash increased by approximately 590% to $3,503,417 as of September 30, 2025, from $1,797,694 at December 31, 2024.
• Working capital improved to $1,595,000 as of September 30, 2025, compared to $416,000 at December 31, 2024.
• Long-term debt was significantly reduced by approximately $4.8 million to $4,645,754 as of September 30, 2025, primarily through the prepayment of $4,997,292 of Oak Street debt using proceeds from the Fortman sale.
• The company adopted a digital asset treasury strategy and policy, acquiring Bitcoin, Ethereum, Cardano, and XRP, totaling $106,402 in fair value as of September 30, 2025.
• A one-time cash dividend of $0.03 per share was declared on September 26, 2025, totaling $373,986, payable on December 2, 2025.
• The Stock Exchange Agreement with Spetner Associates, Inc. was terminated, resulting in non-refundable prepayments of approximately $568,855 being expensed to general and administrative costs.

Sentiment

Score: 6

Explanation: The company shows improved net loss and significantly strengthened liquidity through active capital management and debt reduction. However, core revenue declined, and AEBITDA worsened, indicating challenges in underlying operational profitability. The new digital asset strategy introduces both potential for growth and substantial new risks, leading to a mixed but cautiously optimistic outlook.

Positives

• Net loss significantly improved by 27% for the nine months ended September 30, 2025, compared to the prior year.
• Basic loss per share showed a substantial improvement from $(10.56) to $(1.44) year-over-year.
• Cash and restricted cash balances increased by approximately 590% to $3,503,417, indicating strengthened liquidity.
• Working capital improved to $1,595,000, demonstrating a stronger short-term financial position.
• Long-term debt was substantially reduced by approximately $4.8 million, enhancing the balance sheet.
• The sale of Fortman Insurance Services generated a gain of $3,033,554 and provided capital for debt reduction.
• Successful capital raises through a private placement ($2.15 million net), an Equity Line of Credit ($350,000 net by Q3 end, $300,000 post-Q3), and an At-the-Market offering ($2.02 million net) diversified funding sources.
• The 'OneFirm' strategy aims to improve operational efficiencies, cross-selling, and market presence in the insurance segment.
• RELI Exchange, the B2B InsurTech platform, increased its agent roster by over 300%.

Negatives

• Total revenue (commission income) decreased by 8.72% for the nine months ended September 30, 2025, primarily due to the Fortman sale and lower medical commission revenues.
• Adjusted EBITDA (AEBITDA) worsened by 339% for the nine months ended September 30, 2025, indicating a decline in core operational performance.
• Salaries and wages increased by 58% for the nine months ended September 30, 2025, largely due to non-cash share-based compensation.
• General and administrative expenses increased by 30% for the nine months ended September 30, 2025, driven by director non-cash equity awards.
• The termination of the Spetner Agreement resulted in $568,855 in non-refundable prepayments being expensed, impacting G&A.
• The company reported an unrealized loss of $8,558 on digital assets for the nine months ended September 30, 2025.

Risks

• Financial results and the market price of common stock could be materially affected by the extreme volatility of digital asset prices.
• Digital assets are less liquid than cash and cash equivalents and may not serve as a reliable source of liquidity during market stress.
• The digital asset treasury policy is new and untested, with no assurance it will achieve its intended objectives or be successful.
• Delays in establishing or maintaining appropriate custodial arrangements for digital assets could adversely affect the timing, execution, and security of the DAT strategy.
• There is a risk of being deemed an investment company under the Investment Company Act of 1940, which could lead to burdensome regulatory restrictions.
• The company's digital-asset activities are not regulated as those of mutual funds or registered investment advisers, potentially leading to greater volatility and management discretion.
• Future changes in U.S. federal income tax treatment or other regulations applicable to digital-asset activities could adversely affect the company's tax position or increase compliance costs.
• Operational, technological, and security risks (e.g., breaches, cyberattacks, loss of private keys, network failures, human error) could result in the loss of digital assets, which may not be covered by insurance.
• The irreversibility of blockchain transactions heightens the risk of permanent loss of digital assets.
• Digital-asset activities may create complications with third-party service providers, potentially limiting access to services or increasing operating costs.
• Technological and market developments in the digital-asset ecosystem could render certain digital assets obsolete or less valuable.

Future Outlook

The company plans to continue its aggressive acquisition strategy in the insurance market, focusing on undervalued wholesale and retail agencies. It also intends to expand and grow its Digital Asset Treasury Initiative, integrating blockchain technology into its long-term capital appreciation model and building a diversified portfolio of cryptocurrencies. The company believes its strengthened financial position and flexible access to capital will support operations and strategic growth objectives for at least the next twelve months.

Management Comments

• Management believes its financial position and ability to raise capital to be reasonable and sufficient, and does not believe there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern within one year.
• Management intends to use the net proceeds from capital raises for general corporate purposes, including working capital, technology development, and purchases of digital assets pursuant to the company's Digital Asset Treasury strategy.
• Management continues to evaluate additional financing alternatives and believes that the combination of strengthened balance-sheet metrics, flexible equity facilities, and expected operational cash flows provides adequate liquidity to support both near-term needs and long-term strategic growth objectives.

Industry Context

Reliance Global Group is actively navigating the competitive insurance intermediary business by pursuing an aggressive acquisition strategy and leveraging InsurTech platforms like 5MinuteInsure.com and RELI Exchange. The company's expansion into the digital asset and blockchain sector, including tokenizing insurance-linked assets, represents a significant strategic shift aimed at innovation and creating new investment classes, potentially differentiating it from traditional insurance brokers. This move aligns with broader trends of technology adoption and diversification within the financial services industry, though it introduces new, significant risks associated with the nascent digital asset market.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

• The company is subject to various legal proceedings and claims arising in the ordinary course of business, but management does not believe the outcome of any of these matters will have a material adverse effect on the business, financial position, results of operations, or cash flows.
• No legal contingencies are accrued as of September 30, 2025.

Related Party Transactions

• Americana Credit Agreement and Revolving Note: On March 5, 2025, the company entered into a Revolving Credit Facility Agreement with YES Americana Group, LLC (a related party) for up to $2,000,000. As of September 30, 2025, the outstanding balance was $494,433.
• Interim Crypto Purchase Agreement: On September 16, 2025, the company entered into an agreement with Mr. Moshe Fishman (Director of Insurtech and Operations) to use his personal cryptocurrency trading accounts to facilitate digital asset purchases on behalf of the company. No compensation was paid to Mr. Fishman for these services, and the agreement terminated on October 30, 2025.

Stakeholder Impact

• Shareholders: Potential for increased value through strategic shifts and capital appreciation from digital assets, but also exposure to significant volatility and dilution from equity raises. A special cash dividend was declared.
• Employees: Equity-based compensation programs are in place, and the 'OneFirm' strategy aims to enhance collaboration and career opportunities.
• Customers: The 'OneFirm' strategy and RELI Exchange platform aim to improve service and access to diverse insurance policies.
• Creditors: Significant reduction in long-term debt improves the company's credit profile.
• Regulatory Authorities: Increased scrutiny and potential for new regulations related to the digital asset strategy.

Next Steps

• Focus on the expansion and growth of the business through continued asset acquisitions in insurance markets.
• Pursue organic growth of current insurance operations through geographic expansion and market share growth.
• Continue to grow and execute on the Digital Asset Treasury Initiative, integrating blockchain technology into the long-term capital appreciation model.
• Continue to expand into the digital asset and blockchain sector by building a portfolio comprising cryptocurrencies.
• Monitor the effectiveness of the 'OneFirm' strategy in enhancing market presence and operational efficiencies.
• Utilize proceeds from financing activities for general corporate purposes, including working capital, technology development, and digital asset purchases.
• Complete the establishment of the company's institutional cryptocurrency trading account and transfer digital assets from the interim arrangement.

Key Dates

Recommendation

Reliance Global Group is undergoing a significant strategic transformation, marked by a substantial reduction in long-term debt, improved liquidity through multiple capital raises, and a bold entry into the digital asset space. While the improved net loss and strengthened balance sheet are positive, the decline in core revenue and worsening AEBITDA indicate ongoing operational challenges in the insurance segment. The digital asset strategy, while potentially transformative, introduces a new layer of high-risk, high-reward speculation. A 'hold' recommendation is appropriate as investors should monitor the execution of the new digital asset strategy, its integration with core insurance operations, and the company's ability to reverse the trend of declining revenue and AEBITDA. The current period is one of transition, and the long-term impact of these strategic shifts is yet to be fully realized.

Keywords

Insurance Brokerage, Digital Assets, Cryptocurrency, Insurtech, SEC Filing, 10-Q, Financial Results, Capital Raise, Liquidity, Risk Management, Corporate Strategy, RELI Exchange, Bitcoin, Ethereum, Cardano, XRP